The role of marketing: the purpose of marketing, identifying and anticipating customer needs, building customer relationships, the difference between mass and niche markets, and market share and its calculation.

A focused answer to OCR GCSE Business J204 topic 2.1, covering the purpose of marketing, identifying customer needs, mass and niche markets, and how to calculate and interpret market share.

Generated by Claude Opus 4.89 min answerUpdated 2026-06-02

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What this topic is asking
The purpose of marketing
Identifying and anticipating customer needs
Building customer relationships
Mass and niche markets
Market share
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What this topic is asking

OCR J204 topic 2.1 wants you to explain what marketing is for, how a business identifies and anticipates customer needs and builds relationships with customers, the difference between mass and niche markets, and how to calculate and interpret market share. This opens the marketing topic on Paper 1 and underpins the market research, segmentation and marketing mix that follow.

The purpose of marketing

Marketing does several jobs: it identifies what customers need now, anticipates what they will want in future, designs products to meet those needs, sets a price customers will pay, gets the product to where they shop, and promotes it so they know it exists. Done well, marketing increases sales, builds a strong brand and creates loyal customers who come back.

Identifying and anticipating customer needs

A business that understands its customers can give them what they want before rivals do. Identifying needs means finding out what customers value today (through market research). Anticipating needs means spotting trends and future demand, such as the shift towards healthier or more sustainable products, so the business is ready when the market moves. Anticipating well is a source of competitive advantage.

Building customer relationships

Marketing is not only about winning a sale; it is about keeping the customer. Customer relationships are built through good service, reliable quality, loyalty schemes and communication. A loyal customer costs less to keep than a new one costs to win, buys repeatedly, and recommends the business to others, so strong relationships raise long-term sales and reduce marketing costs.

Mass and niche markets

A mass-market approach benefits from high sales volume and economies of scale but faces strong competition. A niche approach faces less competition and can charge more, but the smaller market limits sales and is vulnerable if the niche shrinks. OCR expects you to match the approach to the business in the case study.

A high or rising market share suggests the firm's marketing is working and gives it more power (over suppliers and pricing). A falling share warns that rivals are winning customers. Market share can be measured by value (sales revenue) or by volume (units sold).

Calculating and interpreting market share

Set out the figures

A trainers brand sells $900{,}000$ of trainers in a year. Total sales of trainers in its market are $6{,}000{,}000$ .

Apply the formula

\text{Market share} = \frac{900{,}000}{6{,}000{,}000} \times 100 = 15\%.

Interpret the result

The brand holds $15\%$ of the market, so rivals hold the other $85\%$ . A $15\%$ share for a single brand in a crowded market is reasonable, but the firm would want to track whether it is rising or falling over time.

Link to a decision

If a marketing campaign next year lifts the brand's sales to $1{,}200{,}000$ while the total market stays at $6{,}000{,}000$ , market share rises to $\frac{1{,}200{,}000}{6{,}000{,}000} \times 100 = 20\%$ . That five-percentage-point gain shows the campaign won share from rivals, justifying the spend.

Try this

Q1. State one advantage of operating in a niche market. [1 mark]

Cue. Less competition, or the ability to charge a higher price.

Q2. A firm sells $250{,}000$ units in a market of $2{,}000{,}000$ units. Calculate its market share. [2 marks]

Cue. $\frac{250{,}000}{2{,}000{,}000} \times 100 = 12.5\%$ .

Exam-style practice questions

Practice questions written in the style of OCR exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.

OCR J204/01 20192 marksState the difference between a mass market and a niche market. (Paper 1, Section A)

Show worked answer →

A 2-mark AO1 question. A mass market is a large market aimed at most consumers with products sold in high volume (for example soft drinks), while a niche market is a small, specialised segment of a larger market with a specific need (for example gluten-free baking). One mark for the idea that a mass market is large and aimed at the majority, one for the idea that a niche is small and specialised. A short example of each strengthens the answer.

OCR J204/01 20214 marksA drinks company sells 600,000 bottles in a market where total sales are 4,000,000 bottles. Calculate the company's market share. Show your working. (Paper 1, Section B)

Show worked answer →

A 4-mark AO2 calculation rewarding the formula, working and a percentage. Market share is the firm's sales as a percentage of total market sales: market share equals 600,000 divided by 4,000,000, multiplied by 100, which is 15 percent. Two marks for the correct method (dividing firm sales by total market sales and multiplying by 100), the rest for the correct figure of 15 percent with the percentage sign. A strong answer adds a one-line interpretation: the firm holds 15 percent of the market, so 85 percent is held by rivals. A common error is to divide total sales by firm sales, giving an impossible answer over 100 percent.

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Sources & how we know this

OCR GCSE Business (J204) specification — OCR (2017)